the impact of global logistics - copy

7/28/2019 The Impact of Global Logistics - Copy

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THE IMPACT OF GLOBALLOGISTICS


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The global logistics management process

1. Environmental analysis

2. Planning

3. Structure

4. Plan implementation and

5. Controlling the logistics program


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Cost-service trade off analysis

i. Order completeness

ii. Shipping accuracy and

iii. Shipment condition


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Guidelines for developing a global logisticsstrategy

Logistics planning should be integrated into thefirms strategic planning process

Logistics departments must be guided by a clearvision and must measure output regularly

Import-export management should try to ensureintegrated management of all elements of thelogistics supply chain from origin to destination

Opportunities to integrate domestic andinternational operations should be pursued toleverage total company volumes with globallyoriented carriers


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The global logistics environment

1. Controllable elements

2. Uncontrollable elements


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Uncontrollable elements

i. Political and legal systems of foreign markets

ii. Economic conditions

iii. Degree of competition in each market

iv. Level of distribution technology available oraccessible

v. Geographic structure of the foreign market

vi. Social and cultural norms of various target markets


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Controllable elements

i. Customer service

ii. International Inventory issues

iii. International Packaging issues

iv. Transportation

v. Warehousing and storage

vi. Other activities like global sourcing of materials


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Issues related to global logistics

1. International customer service issues

2. International inventory issues

3. International packaging issues

4. International transportation issues

5. International warehousing and storage issues


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1. International customer service issues

Consumes longer time

Requires different types of transport carriers,

Multiple transfers and handling

Crossing of many international bordersTime in transit vary from shipment to shipment


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2. International inventory issues

International business have 50% or more of theirassets in inventory

Inventory levels differ depending on the length of

the transitIncludes unique factors such as currency exchange

rates, greater distances and custom duties

In case of high inflation, large inventories provide

inflation hedge


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3. International packaging issues

Handling of products

Climate

Potential for pilferage

Communication and language differencesFreight rates

Customs duties

Customers requirements


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Containers - advantages

Reduced cost due to loss or damage

Increased use of automated or mechanized materialhandling equipments

Lower warehousing and transportation costsAvailable in variety of sizes

Serve as temporary storage facilities at ports andterminals


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Containers- disadvantages

Delay caused in in-bound and out-bound cargo

Large capital expenditures are required to initiate acontainer


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4. International transportation issues

1. Infrastructure

2. Availability of modes

3. Choice of modes among the given alternatives


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a. Ocean or Sea transport

Liner service-regular scheduled passage on establishedroutes

Bulk service-contractual services for individual voyages

Tramp service- irregular routes and scheduled only ondemand

Based on the type of cargo carried

1. Conventional cargo vessels-oversized and unusual

cargo2. Container ships-standardised containers

3. Roll-on roll-off vessels-ocean going ferries


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Shipping documents used in ocean shipping

The standard shipping note(SSN)- what is to happento the goods on arrival at the foreign port

The bill of lading-shipping companys receipt for the

goods loaded


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b. Air transport or Air freight- advantages

Useful for transportation of perishable products,high value, high density products

Less stock holding in loading terminals

Speedier settlement of invoicesEliminates excess need of intermodal transportation

Facilitates JIT

Convenience and ease of administration


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c. Rail and road transport

International consignment note


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Choice of transport method

1. Transit time

2. Predictability

3. Cost of transportation

4. Non economic factors- govt pressure-UNCTAD-United Nations Conference for Trade andDevelopment


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5. International warehousing and storage issues

Storage facilities- bonded warehouse

Free ports- wider area at sea port and

free zones- near air ports


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Queries?????

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